Gender pension income gap ‘obscene’
Women retiring this year will have the lowest incomes recorded since 2008 and be £6,500 a year worse off than men, a report has warned.
Female workers expect to have just £11,750 a year to live on from private, company and state pensions, which is more than one third (36%) lower on average than the annual income of this year’s male retirees of around £18,250, found Prudential.
According to Prudential’s annual survey, women’s expected retirement incomes have generally been in decline since 2009 when they hit a high point of £13,700. At £6,500, the annual gender retirement gap has worsened compared with a year ago, when it was £750 lower.
Pensions experts said the figures could be a sign that some women have been scaling back their pension contributions to pay for more pressing family needs as incomes continue to be squeezed.
Prudential also said that a recent trend seen in official figures towards more women taking part-time jobs may also partly explain the £500 year-on-year decrease in women’s expected retirement incomes, while men have seen a slight rise of £250 compared with 2012.
Richard Eagling, head of pensions for financial website Moneyfacts, said: “It is obscene in this day and age that women should face a more uncomfortable retirement when they make so many sacrifices to bring up children and act as carers. These figures clearly show the extent to which women face a greater risk of poverty in retirement than men.”
Prudential said that factors which should help narrow the gap include the rising state pension age for women and Government plans to give women greater flexibility over their maternity leave from 2015.
A spokesman for Prudential said that women are likely to extend the length of their pensions contributions in the coming years as they work for longer. But he added: “It’s unlikely that retirement incomes will even out for many years to come.”
The Government recently confirmed it will bring forward the start date for its new simpler flat-rate state pension to April 2016. By starting the single tier pension a year earlier than planned, some 85,000 women who would have missed out on the pension will now qualify.
Pensions Minister Steve Webb said: “For too long women have been second class citizens in retirement. But women will be the main beneficiaries of our new flat-rate state pension introduced in 2016. In addition, millions more will start to build up a private pension because of our policy of automatic enrolment into a workplace scheme.”
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